The Remission of Duties or Taxes on Export Products (RoDTEP) is a scheme that has recently been rolled out by the government of India, to provide reimbursements of any tax, duty, or levy paid by the exporters while exporting goods from India.
All the duties or taxes charged at the manufacturing and transportation stage that were previously not refunded under any of the existing schemes will now be covered under this scheme. The RoDTEP scheme has replaced the Merchandise Exports from India Scheme (MEIS) as the latter wasn’t compliant with the World Trade Organisation’s (WTO) trade norms.
Who is Eligible for the RoDTEP Scheme?
- The RoDTEP scheme which has been in effect from January 1, 2021, applies to only those goods and not services that are manufactured locally and exported from India.
- Re-exported goods i.e. goods that are originally produced outside India but then are transported via India, are not covered under the scheme. The scheme is omni-sectoral i.e. it covers goods from all the sectors so that the balance is maintained.
- Manufacturer exporters, as well as merchant exporters or traders, can avail of the benefits of the RoDTEP scheme.
- There is no maximum or minimum turnover threshold to claim the benefits under the scheme.
- The scheme also covers the goods that are exported through e-commerce platforms via courier services.
Features of RoDTEP Scheme
- All the cumulative indirect taxes such as the Value Added Tax (VAT), Central Excise tax on fuel for generating electricity, mandi tax, etc. shall be reimbursed under the RoDTEP scheme.
- RoDTEP scheme aims to achieve the goal of ensuring zero-rating for all export products.
- A high-end technology called Risk Management System (RMS) will be used to verify and track the records of all the exporters.
- The tax rebate will be a fixed percentage of the total Freight On Board (FOB) value of the export which will be stored on an electronic ledger.
- Manufacturers from all the sectors including textile and other labor-intensive sectors can avail of the benefits under the RoDTEP scheme.
Benefits of RoDTEP Scheme
- WTO Compliant: Unlike the MEIS scheme, the RoDTEP scheme is compliant with the trade norms set up by the WTO.
- Technologically Advanced: Input credits under the RoDTEP scheme will be maintained on an electronic credit ledger in the form of transferable credit scrips. Moreover, risk-based profiling of the shipping bills will be done by RMS that will determine whether or not the bills need additional physical intervention by an officer.
- Multi-Sectoral: The RoDTEP scheme applies to goods across all the sectors so that there is uniformity in the country’s exports.
- As announced by the Ministry of Finance, a fully automated refund module will be created which will be available to the public as well as the private sector. This will greatly help in eliminating the menace of double taxation and also bring down the GST tax refund claims and claims for deemed exports.
How to Apply for RoDTEP Scheme Online?
The process of applying for the RoDTEP scheme is quite similar to that of the Rebate of State & Central Taxes and Levies (RoSCTL).
The following steps can be implemented to apply for the RoDTEP scheme:-
- Log on to the ICEGate website (icegate.gov.in)
- File an application using a Class 3 Individual type Digital Signature Certificate
- Attach all the required documents mentioned below and link them to the application
Documents Required to Apply for RoDTEP Scheme
- Shipping Bills
- Electronic Bank Realization Certificate (eBRC)
- Digital Signature Certificate (DSC) - Class 3
- Registration Cum Membership Certificate (RCMC)
Also Read: How to file a Shipping Bill Online?
How does RoDTEP Scheme Work?
Here is a step-wise process of how the RoDTEP scheme works:-
Step 1 : Creating the RoDTEP Credit Ledger
To avail of the benefits provided under the RoDTEP scheme, exporters have to first create an electronic credit ledger by logging on to the ICEGate portal (www.icegate.gov.in) using their class 3 Digital Signature Certificate (DSC). In case an exporter is using the portal for the first time, they need to register themselves and then log in using the credentials.
Once the user has successfully logged onto the portal, they can select the ‘RoDTEP option’ from the scheme name drop-down menu and create a credit ledger account.
The following information can be acquired using this service:-
- Scroll Details
- Scrip Details
- Transaction Details
- Transfer Scrips
- Approved Scrips Transfer
Step 2 : Declaration in the Shipping Bills
Any exporter who wants to claim the benefits provided under the RoDTEP scheme must declare ‘RoDTEPY’ on that particular shipping bill, and ‘RoDTEPN’ in case they don’t want to avail the benefits. If a shipping bill does not specify either of these details, then, automatically, the exporter will not get any reimbursement.
Step 3 : Claim Processing & Scroll Generation
Once the Export General Manifest (EGM) has been filed by the carrier, the shipping bills are profiled RMS and are either sent to an officer for intervention or directly to the respective scroll queues. Once the scrolls are generated, the amount is available in the form of credits on the ICEGate portal.
Step 4 : Generating & Using Scrips
The credits on the portal can be converted into credit scrips by the exporter. Every user is given a unique Scrip ID. Entries are made in the credit ledger every time a new scrip is generated.
Scrips are classified into six types:-
- Active Scrips: These are the Scrips that are currently active and not yet utilized.
- Utilized Scrips: These are the Scrips that have been utilized by the user.
- Transferred Scrips: These are the Scrips that have been transferred and approved by the transferee.
- Transfer Pending: These are the Scrips that are yet to be approved by the Importer Exporter Code (IEC) holder to which the user has transferred them.
- Transfer Rejected: These are the Scrips that have been rejected by either the transferor or the transferee.
- Expired: These are the Scrips that are already expired.
RoDTEP scheme for EOU & SEZ units
At the moment, the government has not extended the RoDTEP scheme to the exports by SEZ and EOU units. However, there has been a great demand from the industry for making these inclusions in the scheme.
Difference between RoDTEP Scheme, MEIS, and RoSTCL Scheme
RoSCTL vs RoDTEP
RoSTCL is a scheme that provides incentives in the form of credit scrips to the exporters based on the Freight on Board (FOB) value whereas under RoDTEP the government will provide rebate on the taxes levied during the manufacturing process of export goods.
RoDTEP vs MEIS
MEIS was not compliant with the trade norms set up by the WTO and hence was replaced by RoDTEP which is compliant with WTO’s trade norms. Under the MEIS scheme the government provided incentives for the export of goods while under RoDTEP the government will provide a rebate on taxes incurred during the manufacturing process of export goods.
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